Nick Clegg is happy to go head to head with Nigel Farage to boost the Lib Dems' profile. Photograph: Christopher Thomond for the Observer

Roll up! Roll up! Book your seats for the great European prizefight. In the yellow corner, Nick "Buster" Clegg. In the purple corner, Nigel "Gasper" Farage.

All right, I may be getting a tad overexcited about a live, televised debate between the sluggers for the Lib Dems and Ukip. They are the leaders of the third and fourth parties of British politics, which is which being a matter of dispute. I grant you that Clegg versus Farage will probably not attract global viewing figures to match the audience that tuned in when Muhammad Ali and George Foreman rumbled in the Zairean jungle. Nor is this encounter likely to earn a place in the pantheon of famous historical clashes to rival Abraham Lincoln's debates with Stephen Douglas two years before the American Civil War.

All the same, Nick's bout with Nigel ought to make the forthcoming Euro elections a whole lot more interesting. Even their rivals think so. Says one senior aide to David Cameron: "It will certainly spice things up."

The gauntlet was thrown down by Mr Clegg. Before picking it up, the Ukip leader hummed and hawed for 24 hours, blustering a bit about how he really wanted to debate with the Tory leader, something there was never any prospect of Mr Cameron agreeing to. In the end, the leader of the Farageistes had to concede that he had "absolutely no choice" but to accept. It would have looked chicken to refuse and anyway it is a good opportunity for him. The Ukip leader gets a high-profile platform from which to advocate withdrawal from the European Union and will be able to make his case unchecked by any competing voice from the right.

Mr Farage is also granted equal status with the deputy prime minister, an implied admission by the Lib Dems that Ukip currently rivals them for the status of third party. This engagement may also help Mr Farage just a little bit when it comes to advancing his argument that he ought to be included when it comes to leaders' TV debates during the next general election.

The more intriguing question is why Nick Clegg decided to issue the challenge to a head-to-head debate in the first place. What is in it for him, the leader of the most pro-European party, going mano a mano with the leader of the withdrawalist party before an election which traditionally favours the antis?

One explanation for the Clegg challenge is sheer desperation. In the opinion polls, his party continues to bump along between eight to 11 points. There is a serious fear in their ranks that the Lib Dems could come fifth, behind the Greens, when the Euro votes are counted this May. The doomiest forecasts of their performance have the Lib Dems losing every one of their dozen MEPs. So far during this parliament, Nick Clegg's tribe has displayed an astonishing capacity to remain calm in the face of electoral slaughter. A diabolical result in the Euro elections, especially if it were to be accompanied by another massacre of their councillors in the local contests that occur on the same day, could be the straw that finally breaks their nerve and triggers a direct threat to Mr Clegg's leadership.

An attention-grabbing clash with Nigel Farage is an attempt to get the Lib Dems noticed, to raise and sharpen their profile in these elections. The media will relish the natural theatre of a lively confrontation between two men of vividly opposed views on a major issue of our day. Broadcasters are already entering bids to screen the event. The Clegg gambit also seeks to turn the Euro elections into a stark argument about being in or being out of Europe, a reframing of the contest that the Lib Dem believes should advantage his party. According to one of his strategists, their essential message will be: "If you want to stop these dangerous rightwingers, you need to vote Lib Dem."

The Lib Dems have long been the evangelists for Europe. Their enthusiasm might have been somewhat tempered since the crisis in the eurozone, but for most of them the commitment to the EU remains an article of quasi- religious faith. Yet at previous Euro elections, the Lib Dems have tended to be rather mealy-mouthed about this. Knowing that the majority of the British public do not share their faith, Europe has been the love that dare not speak its name. It was also the case that rather a lot of the protest voters they used to attract were very antagonistic to Europe.

This time around, Mr Clegg has decided that there is no mileage to be had from approaching the Euro elections in a defensive way. Even if he were minded to enter a competition for Europhobic voters with the Tories and Ukip, that was not a contest his party could ever win. As for Labour, Ed Miliband's party remains committed to membership, but is wary about saying so too often or too enthusiastically when much of the public is in a hostile mood. Mr Miliband has declined to match David Cameron's pledge of an in/out referendum in the next parliament. That may be strategically smart. The Labour leader has thought hard about what a referendum commitment could mean for him in government and foreseen that it would very likely turn into a nightmare. At best, the first two years of his premiership would be consumed by winning the plebiscite. At worst, he'd lose the vote and go down in history as the man who took Britain out against his own wishes. Quite possibly, he could be forced out of Number 10 as well.

Rational thought has gone into Mr Miliband's refusal to make a referendum pledge. But he also knows that it can and will be portrayed as "denying the people a say", a stance that is not popular with voters in general, not popular with many people who are otherwise Labour supporters and not popular with some senior Labour figures who think refusing to promise a referendum will cost them electorally. So Labour would prefer to fight these Euro elections as if they were not really about Europe at all and instead turn them into a referendum on the performance of the coalition.

Labour's hesitancy about Europe and the Tory-Ukip competition for the phobic vote leaves a gap in the market for a party that is unabashed about saying loudly that Britain should remain in the EU. That is the space that Mr Clegg wants to occupy. He grasps that there is not much appetite in Britain for grand and idealistic visions about Europe. The Europe of "ever closer union" is unlikely to feature in his rhetoric. His case will be made on the grittier, more prosaic grounds of economic self-interest. The argument will be that remaining in the world's biggest free trade area is critical for British prosperity.

The audience for this argument is larger than some might think. Despite all the many convulsions in the eurozone over the last few years, despite the onward march of the Europhobes through the Tory party, despite Labour's retreat from the Euro-enthusiasm of the days of Tony Blair, despite the Ukip insurgency, despite the drift of public opinion towards withdrawal, a significant chunk of the electorate remains committed to staying within the EU. When we last asked Opinium to poll attitudes towards Europe, 26% of respondents said that they regarded the EU as "a good thing" overall and 36% said they would vote to remain a member of the EU. That means about three times as many people have a good opinion of the EU as currently feel positive about the Lib Dems. About four times as many people would vote to stay within the EU as currently say they would vote for the Lib Dems. So it makes sense for Nick Clegg to fish in this sea. By presenting these elections as a chance to halt the rise of rightwing Europhobia, he hopes to attract some votes from pro-European Labour people and some support from pro-European Tories. The latter do exist.

Senior Lib Dems privately confide that their goal is quite modest: to lift their vote share by three to four points above their current poll ratings. When you are bumping along at low levels of support, just a few extra points of vote share can make a life-or-death difference when the seats are awarded on a proportional basis. For example: to win one seat in the Yorkshire region, the Lib Dems need to secure between 10% and 12% of the vote. A strategist for a rival party even goes so far as to call the Clegg gambit "smart".

Nick versus Nigel will probably be mutually beneficial, a win for both of them. The Lib Dem leader gets a high-profile opportunity to present himself as the principled champion of staying within Europe and the voice of the moderate centre standing up to the right in a way that David Cameron and Ed Miliband won't. Nigel Farage is gifted a big chance to enthuse his supporters, appeal to "out" Tories and galvanise Europhobes behind his banner. Whether their encounter will actually change many people's minds is altogether more doubtful.